Major CA Burger Chain Plans Closure Of Up To 200 Locations

CALIFORNIA — Jack in the Box plans to close as many as 200 of its locations as part of a plan to approve the company's financial outlook, executives announced this week.

As part of the plan, the company expects to close between 80 and 120 locations by the end of the year. It will then close additional restaurants starting next year, shuttering a total of 150 to 200 locations the company described as "underperforming."

The San Diego-based Jack in the Box has some 2,200 restaurants in 22 states, including 942 locations in California — the most of any state.

The company hasn't yet revealed which locations are set to close as part of the plan.

Jack in the Box also owns Del Taco. As part of the company's overall financial plan, executives said they're "exploring strategic alternatives" for Del Taco, which could involve selling the brand.

In the most recent quarter, same-store sales at Jack in the Box were down 4.4% and down 3.6% at Del Taco, according to the company, which posted an adjusted second-quarter earnings of between $66 and $68 million.

The "Jack on Track" financial plan, focused on paying down debt, also involves the company selling some of its real estate, discontinuing its stockholder dividend and pulling back on the launch of new company-owned stores.

“Our actions today focus on three main areas: addressing our balance sheet to accelerate cash flow and pay down debt, while preserving growth-oriented capital investments related to technology and restaurant reimage; closing underperforming restaurants to position ourselves for consistent net unit growth and competitive unit economics; and, an overall return to simplicity for the Jack in the Box business model and investor story," said Jack in the Box CEO Lance Tucker, less than a month after he was hired as CEO.

“In my time thus far as CEO, I have worked quickly with our teams to conclude that Jack in the Box operates at its best, and maximizes shareholder return potential, within a simplified and asset-light business model,” said Tucker.